More Bills than Thrills? Comparing Predicted and Actual Levels of Essential and Nonessential Spending
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Authors
Louie, Therese A.
Nishijima, Marissa Y.H.
Issue Date
2021-10
Type
Animation
Language
en_US
Keywords
Marketing
Alternative Title
Abstract
In terms of the expense, spending $50 a week on both commuting and on a recreational happy hour should be perceived equally. Yet, it is proposed that consumers tend to overestimate their level of spending on necessities, and underestimate their extent of nonessential expenses. In two studies, participants predicted their level of spending in essential and nonessential purchase categories, and then recorded their actual spending across multiple weeks. Results show support for each hypothesis in some categories, and propose factors that produce accurate estimates for other purchase types. Consequences of spending misperceptions are discussed, as well as suggestions to reduce them.
Description
Peer-Reviewed Journal Article. 17 pages
Citation
Publisher
Drake Management Review